FAQs
Tax regimes
There are two tax regimes which affect Marlin:
- the Portfolio Investment Entity or “PIE” regime, which commenced on 1 October 2007.
- the Foreign Investment Fund or "FIF" regime, which commenced on 1 July 2007 for Marlin taxpayers.
PIE Regime
Marlin has registered for the Portfolio Investment Entity (PIE) tax regime which commenced on 1 October 2007. The regime has significant advantages for shareholders:
- Natural person Shareholders or Trustees do not have to include dividend income from Marlin in their tax return (although if you are on 21% marginal tax rate you can elect to include dividends, to take advantage of any imputation credits attached at the higher rate of 33%). Other shareholders only have to include fully imputed dividends in their income, in which case the imputation credits will usually fully offset any tax liability. Imputation credits will be attached to dividends to the fullest extent possible. To the extent that the dividend is not imputed, the dividend should be treated as excluded income for New Zealand resident investors.
- There is no longer a restriction on the distribution of capital gains to shareholders.
- The Manager, Fisher Funds, will have more flexibility to undertake one-off 'short-term' transactions (however, overall they will maintain their long term buy and hold strategy).
FIF Regime
Marlin will be taxed on most of its investments under the new foreign investment fund ("FIF") regime. Under the regime, Marlin will apply the fair dividend rate ("FDR") method to calculate its annual income tax liability in respect of its investments. Marlin will generally be treated as deriving taxable income each year equal to 5% of the market value of its investments (excluding those not subject to the FIF regime). Marlin will generally not be taxed on any actual dividend received or any captial gains from selling shares subject to the FIF regime.
The above comments do not constitute tax advice to investors, as tax implications will depend on each investor’s tax profile and circumstances. We encourage shareholders to seek their own tax advice.
How do I check the value of my shares and/or warrants?
You can ask any sharebroker, check in the major newspapers or follow this link for a link to the NZX website. "MLN" is the code for Marlin shares and Marlin warrants is "MLNWA". When can my warrants be converted to shares?
A warrant is exercisable in whole or in part subject to a minimum exercise of 500 warrants (or such lesser number as the warrant holder may hold) by the holder lodging with the Share Registrar the notice of exercise of warrant in writing together with payment of NZ$1.00 for each new share taken up.
The remaining exercise dates are 15 September 2010 and 31 October 2010 (final exercise date).
Options or Warrants?
You may have heard Marlin warrants (MLNWA) also being referred to as Marlin options. These are the same things and can be called either “warrants” or “options”. Whatever term is used they entitle the holder of the warrant (option) to subscribe for a share at an exercise price of $1.00, exercisable as mentioned in the above paragraph. Computershare Registry records these as options on your Statement of Holdings. Warrants are listed on the NZX under the code of MLNWA and are categorised under the warrants section in the newspaper.
What does the "diluted NAV" mean?
The warrants (or options as they are also called) provide warrant holders with an opportunity to buy shares at a price of $1 on the warrant exercise dates (see above paragraphs). Warrant holders will probably only exercise their right to buy shares at $1 if the share price is at or above $1.
The diluted NAV shows the impact on the NAV if all warrants were to be exercised at that point at a price of $1 each. We publish a weekly net asset value and a diluted net asset value to show the impact.
What is the level and criteria for the Manager’s eligibility for the Management Fee and the Performance fee?
In return for the performance of its duties as Manager of the Company's portfolio, the Manager is entitled to be paid:
A Management Fee equal to 1.25% per annum of the Gross Asset Value, calculated weekly and payable monthly in arrears. The Management Fee for each financial year of the Company will be reduced by 0.10% for each 1.0% per annum by which the Gross Return for that financial year is less than the change in the NZX 90 Day Bank Bill Index over the same period, but subject to a minimum Management Fee of 0.75% per annum of the Gross Asset Value for that period.
The Company will pay the Manager a Performance Fee for providing excess returns over and above the Benchmark*. The Manager will be paid 15% of the lesser of:
- the excess return (being the dollar amount by which the Net Return per Share exceeds the product of the Benchmark multiplied by the Net Asset Value per Share at the start of period) for the applicable preiod multiplied by the number of Shares on issue at the end of the period; or
-
the highest Net Asset Value per Share previously acheived at the end of any previous calculation period in respect of which a Performance Fee was payable; and
-
the Net Asset Value as at the commencement date of the Management Agreement, being the offer proceeds less expenses incurred and all other liabilities of Marlin at that date per Share, multiplied by the number of Shares on issue at the end of the period (the High Water Mark).
The calculation of the Performance Fee is also subject to certain rules set out in the Management Agreement, including making adjustments for changes in the number of shares on issue and dividends paid etc and the timing of those changes. The Performance Fee will be calculated for the first period from the commencement date to 30 June 2008 and annually to 30 June each year thereafter, although the Company may elect to provide for any Performance Fee more regularly in calculating the Net Asset Value. Any Performance Fee will be paid to the Manager within 30 days of the end of the calculation period.
The Performance Fee will be paid to the Manager in cash. However, subject to all relevant legal requirements (including under the Securities Markets Act 1988), the Manager has agreed, within 90 days of the receipt of any Performance Fee, to apply 25% of any such Performance Fee to purchase ordinary shares in the Company through the order matching market of the NZSX. The obligation to apply part or any Performance Fee to the purchase of shares in the Company shall cease if and to the extent that the Manager holds (or would hold) more than 4.99% of the ordinary shares on issue in the Company at that time.
The Manager may not sell those shares purchased in accordance with these provisions within 180 days of the date of receipt of the Performance Fee relating to that purchase (other than with the prior approval of the Company) and must in any event comply with all relevant legal requirements (including under the Securities Markets Act 1988) in so doing.
All fees are exclusive of GST, which will be added where applicable.
* Benchmark - Change in the NZX 90 Day Bank Bill Index during the calculation period plus 5% per annum.
My address has changed. Who should I tell?
Please write to Computershare Investor services at the following address:
Computershare Investor Services Limited
Level 2, 159 Hurstmere Road
Takapuna
Private Bag 92119
Auckland
Fax: 09 488 8787
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